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Gillard flags delay in carbon announcement

The federal government appears to have pushed back its own deadline for announcing details of an agreed carbon price mechanism with the Australian Greens and independent MPs.

The government had been keen to release details of the scheme in early July, a year ahead of its start date.

But Prime Minister Julia Gillard has sought to hose down expectations the government's multi-party climate change committee is on the verge of announcing an agreement.

When asked whether details of a carbon price would be announced in July, Ms Gillard told ABC Television today: "We're certainly aiming to get this done as soon as we can, and all of the details out there for people to see.

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"But we're going to get every bit of this right."

When pressed on whether a release date would be delayed past July, Ms Gillard said: "We'll get it out there as soon as we can."

The government has teased voters with hints about a compensation package that aims to cushion most households from the price impacts of a carbon tax.

"Seven million Australian households won't see a cent lost through carbon pricing," Ms Gillard said.

Those at the lower end of incomes would be protected by a "safety net buffer" that gave them 20 per cent more than the expected impact of a carbon tax.

"You'll be able to see all of the details of the tax cuts and payment increases when we do the package," Ms Gillard said.

Government climate change adviser Ross Garnaut warned there were dangers in setting a carbon price that was too low.

He wants Australia to link with international trading schemes in mid-2015.

The economist says if the initial fixed price set by the multi-party climate change committee is too low there'll be problems when that occurs.

"If the price of carbon is too low to begin with then we'll have another adjustment when we link to international prices in a few years' time," Professor Garnaut told ABC Radio.

"Of course that depends on what international prices are then and the exchange rate."

Professor Garnaut said it was likely the Australian dollar would be lower in four years' time which would put upward pressure on the carbon price.

Also, the European market, which is the largest in the world at present, fluctuates but the average price is considerably higher than today's.

"Taking all that into account to avoid another dislocation, another big adjustment, you don't want to go too low."

Professor Garnaut has recommended a starting price of around $25 a tonne increasing by 4 per cent a year in real terms until mid-2015.